Innovation in a soft market (Part 2)

IN the current political and economic climate, coupled with the tightening of bank loan requirements, home buying is becoming increasingly challenging to the populace.

This, in turn, breeds a more cautious and discerning consumer, wanting to look at various factors before committing to a purchase. “Location, location, location” doesn’t pack the same punch as before.

Developers, aside from choosing strategic locations for their projects, are now enticing buyers with various perks and packages to get them to embrace their particular brand.

Based on the various offers, developers aren’t so much looking to offer material goods as add-ons, but are leaning more towards offering a safe and hassle-free buying experience, with most offering refunds should loan applications get rejected, providing an assurance to potential buyers and easing their doubts and reservations.

Rebates aren’t as prominent and are rarely offered, but buyers need only to place a minimal booking fee in order to seal the deal - a win-win for both developer and buyer.

Developers are further smoothing out the buying process by bearing the behind-the-scenes charges such as stamp duty and loan legal fees, which can prove to be another burden on their own.

Developers are willing to make an admittedly minor loss for a major win — the price of the property sold and the margins associated with it outweigh the small price borne to help the customer buy into their product — another win-win situation. Buyer gets a piece of property, developer sells another unit.

Based on the data, gifts aren’t really a priority offering for developers in perhaps a sign that potential buyers aren’t looking for gifts with their purchase. Lucky draw events and gifts are usually done during project roadshows and launch events, meant to draw and build interest in the development. That said, developers are getting creative in this aspect, offering trips, electronic devices and cars.

To sum it up, developers aren’t attracting buyers via gifts and lucky draws; rather, they are looking to eliminate a lot of hidden costs associated with buying a house, so that buyers aren’t hit with sticker shock when they want to purchase a unit. This can be equated to offering paths of least resistance and minimal barriers, so the buyer only needs to be concerned with the actual price of the unit, and the applying of loans.